help please

tonycollis8608

hi wondering if anyone could offer any advice, we bought our first home 2 years ago for 111,500 2 bedroom terrace house, with a 95% mortgage, we recently had it valued and now it is worth 105,000, we are desperatly in need of upgrading to a bigger house because we are planning to start a family in the near future, we have very little savings and no real debt apart from our mortgage, our predicament is what to do we know to move we will have to stump up a deposit of atleast 10% but to save that money will take forever and it may be a long wait for our house price to go up to what we bought it for let alone to make money on it, we were wondering if the answer would be to get a bank loan and use that to pay for a deposit and get a better mortgage on a new property, we would really apreciate if anyone had any advice or has been in a similar predicament. :j

poppysarah

Well don't extend the family if the house is really too tiny.

In the old days you'd have about 20 people living in a shoe box...
Shoe box? You were lucky. We only had a sugar bag.
Sugar bag? You were lucky, we only lived in a rut in the road.

domcastro

:rotfl:

poppysarah wrote: »

Well don't extend the family if the house is really too tiny.

In the old days you'd have about 20 people living in a shoe box...
Shoe box? You were lucky. We only had a sugar bag.
Sugar bag? You were lucky, we only lived in a rut in the road.

:rotfl:

Robert_Sterling_3

Poppysarah
Domcastro

The OP is asking for help here.
Not for a "Monty Python" style joke

poppysarah

And my answer was don't extend your family if your house is too small and you can't afford to move. Or put up with the crowding.

I think most people have not seen the overcrowding number for their property. Isn't it about 8 people for a 2 bed terrace?

tonycollis8608

sorry i think weve come across wrong, we want to start a family, and we feel like we will never be able to, we are really just asking for advice as how we could move on if it will ever be possible

kunekune

I think the answer is that it is going to be difficult for you to move: you never had a lot of equity and right now it sounds as though you are in negative equity. It is NOT a good idea to take on extra debt - you won't get a cheap loan, and actually you may well not get one at all. If you might be reducing your income, learn now to live on less and use the surplus to reduce your current mortgage as fast as possible. Even small overpayments make a difference ... and if you can afford a bigger house, you an afford to pay more into this one.

But also, you might need to think about whether a bigger house is really essential for your plans. While some responses were sarcastic, their basic point was quite right: you can probably manage where you are for some time. You don't have any children yet, and it will be some time before you do - it takes a while to conceive, and then it's 9 months or so till the baby arrives. And for the first couple of years, children don't really take up a lot of space. The tat we get for them does, but no-one really needs that much stuff. If you keep the clutter down, and make clever furniture choices you'll be just fine.

I understand that you had a picture of what your home would be like once children arrived, and that the economy has just kicked you and others in the gut, but you don't have to put the rest of your life on hold. (And let's hope that when you don't end up with triplets! Twins would be ok, they can share a cot.)

m_13

How much do you owe on the mortgage? It sounds like it is likely you are in negative equity.

If you are in negative equity then there are a few useful topics on this forum but the bottom line is that your mortgage exceeds the equity in the house so even if you sold it, you would be left with an outstanding debt.

If you overpay on your mortgage - make sure you are allowed - then you could reduce the debt so it is lower than the value of the house. You would not be in negative equity then. However, you say you have very little savings and so this may not be possible.

If I'm brutally honest then negative equity and very little savings aren't the ideal time to be thinking about incurring the expense of starting a family. Children are extremely expensive and if you both work, then it's likely that you will go down to one income for at least a short period.

Living in a two bed terrace doesn't stop you having children. You'll find posts on this forum and others from people who have a child (or children) and live in a one bed flat. However, it sounds like finances just aren't right for you to support children.

I don't know what your rush is to start a family. Family pressure? Age? If you only had a 5% deposit two years ago when you bought this property then finding a 10% deposit when you are in negative equity is going to be very difficult.

Why don't you read all the moneysaving tips on this website and see where you can save money on your expenditure. Check if you can overpay on your mortgage and start reducing your debt and increasing your savings. We've 'played at being poor' many times in the past and I've had a property repossessed when I was in my twenties in the 1980s so I know things can be tough. However, you need to take control of the situation now. In my opinion starting a family when you know you can't really afford it is irresponsible but there again what do I know! I have colleagues who couldn't afford to have children but did and now are upset every school trip/christmas/birthday that they can't afford to give them what they want.

Probably not the answer you want but unless you reduce your debt and build up your savings you won't have a deposit or be out of negative equity. Please don't consider getting a bank loan and a bigger mortgage. If you can't afford to save, how are you going to afford to pay them :eek:

poppysarah

tonycollis8608 wrote: »

sorry i think weve come across wrong, we want to start a family, and we feel like we will never be able to, we are really just asking for advice as how we could move on if it will ever be possible

Why can't you start a family in a 2 bed place?

It's a serious question without wanting to poke you with a sharp stick.

2 bed houses should be big enough!

You're probably not in the best financial situation to start thinking about one of you giving up work - so either declutter so your house feels bigger, or save up like loonies to give you the savings backup you'd need to move and pay off negative equity.

pawpurrs

It doent sound like you can afford to move, a two bedroom place should be fine with one child.

tonycollis8608

Thanks all for your views, i realise we would proably easy manage to have children in this house, but for the future if we did want to move how could we make it possible, we took a mortgage of 108,500 when we bought the house it is now worth bout 105,000, our current mortgage is interest only aswell im just a bit confused how we could ever move on, thanx all for ure time